Industry Transformation Initiated by a Technological Innovation - Case of UK Grocery Retailing

Arhi Kivilahti

    Research output: ThesisDoctoral ThesisMonograph

    Abstract

    Companies respond differently to challenges posed by innovations. It has been argued that the established companies are slow to react to radical technological innovations whereas companies entering the industry are capable of framing novel technologies differently and thus challenge the established companies. However, this argument about incumbent challenger dynamics has been questioned by more recent studies. This thesis studies how different cognitive frames towards innovations influence the ways in which companies respond to the innovations, which subsequently initiate an industry transformation. Furthermore, the thesis analyses the framing and incumbent challenger dynamics among UK grocery retailing after the introduction of online technologies. The transformation extends from the mid 1990´s to recent developments in 2011. The empirical part of the research is based on an analysis of media archives and on interviews with industry experts. In UK grocery retailing the online channel received little attention during the early years, but the dotcom boom in the turn of the millennium initiated a hype in the market. During the hype majority of companies adopted the online channel framing it as a disruptive innovation. These companies did not adopt the innovation during the early years, because the innovation was not seen as a threat and did not require any action. This was contrary to the early adopters who framed the innovation as an opportunity. During the hype of the dotcom boom external pressure led the later adopters to defensively act with a rapid response making them vulnerable for the excessively positive expectations of the hype. Eventually the utilization of the existing capabilities and competencies by incumbent companies along with the long maturation period proved to be the reason for the success of the incremental frame to the innovation, used by an incumbent. Contrastingly to seem other parts of retailing, the impact of online business has remained low for the grocery retailing, representing less than 10% of the market. However, the online channel is expected to be an important part of the future of the grocery retail industry. This can be seen in the fact that online is a significant part of the overall growth of the sales. Additionally, online channel has started to influence the business models of the existing businesses, which strive to incorporate online as an integral part of the channels offered. It remains to be seen how the growth of the online channel will shape the network of physical stores.
    Translated title of the contributionToimialan muutos teknologisen innovaation johdosta - tapaus ruoan verkkokaupan kehityksestä Englannissa
    Original languageEnglish
    QualificationDoctor's degree
    Awarding Institution
    • Aalto University
    Supervisors/Advisors
    • Viitanen, Kauko, Supervising Professor
    • Skippari, Mika, Thesis Advisor
    Publisher
    Print ISBNs978-952-60-5257-1
    Electronic ISBNs978-952-60-5258-8
    Publication statusPublished - 2013
    MoE publication typeG4 Doctoral dissertation (monograph)

    Keywords

    • real estate
    • retailing
    • innovation management
    • industry emergence
    • technological innovations

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